By Sudip Kar-Gupta and Thierry Leveque
PARIS (Reuters) - Jerome Kerviel, the Frenchman blamed byhis company for the world's biggest rogue trading scandal, leftjail on Tuesday after winning a legal battle against detention.
Kerviel, 31, walked free from the Sante prison in Parisafter five weeks in custody while investigators continue toprobe heavy losses at French bank Societe Generale.
Under the terms of his conditional release, there arestrict limits on his movements and contacts.
SocGen unveiled 4.9 billion euros (3.8 billion pounds) oftrading losses on January 24 and blamed them on unauthorisedstock market deals carried out by Kerviel, a junior trader atthe bank.
Looking relaxed in a dark suit and open-necked pink shirt,the former trader stepped into a Paris side street accompaniedby his lawyer Elisabeth Meyer.
Kerviel did not speak to reporters but paused and smiledbriefly for cameras and was driven off in a small black car.
"He's going to take a rest," Meyer told reporters.
Kerviel is under formal investigation for breach of trust,computer abuse and falsification.
He has acknowledged trading without approval but has toldpolice his supervisors must have known of his activities.
Judges placed him under formal investigation shortly afterthe scandal broke but allowed him to remain free under judicialsupervision, a system which resembles bail.
Prosecutors appealed and he was sent to the Sante, a prisonoften used for high-profile detainees, on February 8.
That decision was reversed on Tuesday and prosecutors saidthat this time they would not appeal.
Under the terms of his conditional release, there arestrict limits on his movements and contacts.
"Jerome is very happy, I don't think he expected it," Meyersaid after visiting him in prison following the court sessionand before he was actually freed.
Kerviel's dizzying stock market bets totalling 50 billioneuros under the noses of SocGen have spawned a handful ofhastily written books about the photogenic former trader.
For some, Kerviel's trades symbolised the folly of modernmarkets, whose recent collapse exposed his risky trades.
Among others, particularly in Internet chatrooms, Kervielhas been lauded as an anti-establishment folk hero.
RESTRICTIONS
Kerviel is barred from entering a trading room or anexchange, may not engage in any activities related to financialmarkets, and has to present himself weekly at a police station.
He cannot leave the Ile-de-France central French regionthat includes Paris without permission and must surrender hispassport and identity card. He has to inform the investigatingmagistrates each month where he is staying.
He cannot meet witnesses or other parties in the case.
Societe Generale's lawyer, Jean Veil, said he was pleasedwith the strict controls under which Kerviel was placed.
"The Societe Generale is a victim, and I believe victimsshould not cry out for vengeance but to obtain reparation ofthe damages," Veil said.
An internal SocGen report said Kerviel had acted alone butsaid the bank's control systems were not up to preventingfraud.
However satirical weekly Le Canard Enchaine reported onTuesday that judges had been told by one of Kerviel's formermanagers that rogue trades could have been spotted if thebank's control systems had been applied properly.
One of the warnings from derivatives exchange Eurex aboutKerviel was not read by the person at SocGen to whom it wasaddressed by email, the newspaper said, quoting from testimony.
Weakened by the losses, SocGen is seen as a takeover targetwith arch rival BNP Paribas trying to drum up political supportfor a takeover bid.
In 1999, BNP narrowly failed to buy its smaller rival.
SocGen was already facing losses from the subprime mortgagecrisis in the United States that has claimed some big-namevictims, most recently Bear Stearns.
Bank of France Governor Christian Noyer criticised SocGen'srisk-control systems and French President Nicolas Sarkozy hasmade clear he thinks SocGen Chairman Daniel Bouton should quit.
Although he offered to resign when the losses firstemerged, Bouton has said he has a mandate from the board tokeep his job and continue with the bank's strategy to remainindependent.
(Writing by Tim Hepher, Marcel Michelson, Editing byQuentin Bryar and Keith Weir)
